Correlation Between Caterpillar and 594918BB9
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By analyzing existing cross correlation between Caterpillar and MICROSOFT P 27, you can compare the effects of market volatilities on Caterpillar and 594918BB9 and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Caterpillar with a short position of 594918BB9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caterpillar and 594918BB9.
Diversification Opportunities for Caterpillar and 594918BB9
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Caterpillar and 594918BB9 is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Caterpillar and MICROSOFT P 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MICROSOFT P 27 and Caterpillar is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Caterpillar are associated (or correlated) with 594918BB9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MICROSOFT P 27 has no effect on the direction of Caterpillar i.e., Caterpillar and 594918BB9 go up and down completely randomly.
Pair Corralation between Caterpillar and 594918BB9
Considering the 90-day investment horizon Caterpillar is expected to generate 4.46 times more return on investment than 594918BB9. However, Caterpillar is 4.46 times more volatile than MICROSOFT P 27. It trades about -0.01 of its potential returns per unit of risk. MICROSOFT P 27 is currently generating about -0.16 per unit of risk. If you would invest 36,167 in Caterpillar on November 8, 2024 and sell it today you would lose (282.00) from holding Caterpillar or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Caterpillar vs. MICROSOFT P 27
Performance |
| Timeline |
| Caterpillar |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| MICROSOFT P 27 |
Caterpillar and 594918BB9 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caterpillar and 594918BB9
The main advantage of trading using opposite Caterpillar and 594918BB9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caterpillar position performs unexpectedly, 594918BB9 can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in 594918BB9 will offset losses from the drop in 594918BB9's long position.| Caterpillar vs. AGCO Corporation | Caterpillar vs. Nikola Corp | Caterpillar vs. PACCAR Inc | Caterpillar vs. Deere Company |
| 594918BB9 vs. EvoAir Holdings | 594918BB9 vs. Grupo Aeroportuario del | 594918BB9 vs. Altair Engineering | 594918BB9 vs. MGIC Investment Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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